General

Results

Financial results

Triodos Renewables Europe Fund closed its financial year with a net operating gain of EUR 0.8 million. EUR 2.2 million was generated from dividends and interest income. In addition, EUR 1.1 million in subordinated debt repayments were made to the fund, resulting in a cash yield on a portfolio level of 4.4%. The cash yield was lower than the 6.4% in 2014; partly due to lower distributions to the fund from the wind investments and partly due to the fact that the Spanish solar investments did not distribute any income to the fund in 2015. The bottom-line result was EUR 2.8 million (2014: EUR 2.2 million), benefiting from a positive revaluation of the portfolio of EUR 2.0 million, besides a net operating income.

Return

The overall performance of the fund (I-cap) in 2015 was 4.7%, of which 3.0% was realised in the final quarter. The fund’s value grows when new investments are made and the renewable energy assets in portfolio mature. This value is calculated by forecasting the future dividend, interest and loan repayments of the wind and solar PV projects. The fund’s value developed positively over the year. The first quarter return was negative due to lower power price forecasts. In the three other quarters, the performance was either in line with (second and third quarter) or exceeding expectations (fourth quarter) due to an upward adjustment of the long-term power price forecast following a higher long-term coal price forecast and a stronger US dollar. Finally, the return was also positively influenced by the higher investment ratio of 86,0% of the total assets, against 79,0% in 2014.

Return based on net asset value (NAV) per share*

NAV per share is based on share prices as published on December 31, 2015, i.e. the last price at which shares were traded in the reporting period.

**

The Z-share class has a limited history. Historic returns are based on the similar R-share class which has an identical investment policy.

R-cap (EUR)

4.1%

0.8%

1.4%

2.6%

I-cap (EUR)

4.7%

1.4%

2.0%

3.2%

Z-cap (EUR)**

4.7%

1.2%

1.6%

2.7%

Liquidity

Due to the investments made in the course of the year, the fund’s liquidity ratio (cash and cash equivalents) declined from 20.9% of the fund’s net assets at the end of 2014 to 14.0%1 at the end of 2015. The decrease is attributable to the investments made by the fund, which exceeded the net inflows from new investors, receipt of dividends, repayments and interest. Given its semi open-ended structure the fund has a liquidity ratio target of 10% of the fund’s net assets, including a EUR 2.5 million standby credit facility. When including this standby facility, which is available on demand, the available cash and cash equivalents add up to 17.9% of the net assets. Based on the latter, the fund aims to deploy the surplus liquidity of EUR 5.1 million with a view to both enhancing the fund’s financial performance and the environmental impact. The fund has committed part of the current liquidity to investments expected to take place in the first half of 2016.

1 Investment restrictions are presented against total assets. The liquidity ratio is presented against net assets.

Costs

The largest item in the cost structure of Triodos Renewables Europe Fund is the management fee paid to the alternative investment fund manager (‘investment manager’), Triodos Investment Management. The latter uses this fee primarily to cover staff costs and travel expenses incurred in connection with investments. The investment process is generally quite labour intensive. Other significant costs are related to RBC Investors Services Bank S. A, amongst others for their depositary and administrative services.

In 2015, Triodos Renewables Europe Fund’s ongoing charges, including the management fee, amounted to 2.53% for the Z-share class, 3.07% for the R-share class and 2.45% for the I-share class (2.48%, 2.85% and 2.49%, respectively, in 2014).